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The Chief Executive Officer (CEO) of Beefmaster, Louw van Reenen, says this negative outlook in terms of profitability is due to higher beef prices and an overall low appetite for beef owing to South African consumers being under immense financial strain. 

Meanwhile, economists in the country are predicting that the country is as of 2022 returning to its low economic growth – confirming the continuing financial strain mentioned by the Beefmaster head.

Van Reenen has candidly shared that the challenge to remain profitable is forcing the industry to rely on/feed off its stakeholders and try to ready staff for when the situation improves. One way that these stakeholders can rely on one another is by sharing information on customer patterns and trends. He is also suggesting that a traceability system be implemented throughout the industry.

LISTEN: #OFMBusinessHour: Collaboration needed to open up SA beef to new and more profitable markets

The Beefmaster Group CEO also alluded to the impact of inconsistent energy supply on businesses in the country, adding that there is an opportunity for the industry in the alternative energy space. He argues, however, that this “takes our eye off the ball” because the issue of energy supply in South Africa is beyond the industry’s control.

On a rather positive note, however, export numbers in the beef industry are beginning to climb following some lobbying from key stakeholders like the Beefmaster Group. Previously Louw’s brother Roelie van Reenen, who is the Supply Chain Executive at the group, told the Business Hour that by April 2021 only 5% of the country’s beef supply was being exported to other countries, including on the African continent.

He went on to add that the Department of Agriculture, Forestry, and Fisheries cannot be expected to do this alone.

Well, it now appears that a weaker rand and the lower demand for beef in South Africa has led to a slight increase in exports as compared to April 2021.

OFM Business Hour